2018 (3) TMI 1142 - AT - Customs

Tribunal overturns confiscation order, penalties, and duty demand, citing CKD import exemption.

The Tribunal set aside the order confiscating goods for mis-declaration, imposing a penalty, and confirming a differential duty demand. It ruled in favor ... Valuation - Panasound music system - interpretation of statute - Rule 2(a) of Rules of Interpretation - Held that: - firstly, the product Panasound Music System was not imported in assembled form. Secondly whatever parts were imported in CKD form, the parts such as CD/VCD mechanism and top cover were not in the consignment. Therefore Rule 2(a) of Rules of Interpretation is not applicable Secondly whatever parts were imported in CKD form, the parts such as CD/VCD mechanism and top cover were not in the consignment. Therefore Rule 2(a) of Rules of Interpretation is not applicable. Secondly, the provisions of Section 4A can only apply when the goods is in retail pack. In the present case the goods imported is in CKD parts and it is not assembled and imported in retail pack and the same is not capable of being sold as such. Appeal allowed - decided in favor of appellant. Issues: Mis-declaration of goods, Confiscation of goods, Differential duty demand, Penalty imposition, Applicability of Standards of Weights and Measures Act, 1976, Interpretation of Rule 2(a) of Rules of Interpretation, Application of Section 4A of Central Excise Act, 1944In this case, the appellant imported goods declared as components for VCD with Radio, but upon examination, they were found to be Panasound Music Systems missing the CD/VCD mechanism and top cover. The adjudicating authority confiscated the goods for mis-declaration under Section 111(iii), imposed a penalty, and confirmed a demand for differential duty based on re-classification and MRP valuation. The appellant argued that as the goods were imported in CKD form without MRP, the Standards of Weights and Measures Act, 1976 did not apply, and there was no mis-declaration to avoid CVD payment under Section 4A. The appellant cited relevant judgments to support their claim.The Assistant Commissioner for Revenue contended that the goods should be considered a music system under Rule 2(a) of Interpretation Rules and subject to CVD based on MRP. The Tribunal analyzed the situation and found that the goods were not imported in assembled form, crucial parts were missing, and they were not in retail packaging. As a result, Rule 2(a) did not apply, and Section 4A could only be invoked for goods in retail pack. Since the product was in CKD form and not capable of being sold as is, the Standards of Weights and Measures Act did not apply. Therefore, the Tribunal concluded that there was no mis-declaration by the appellant to avoid CVD payment as per Section 4A of the Central Excise Act, 1944.Ultimately, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment highlighted the importance of the form of imported goods, the applicability of relevant laws, and the necessity for a comprehensive understanding of the components involved in determining mis-declaration and duty liabilities.